Department for International Development

Amendment of terms for the Contingent Liability arising from the Loan Guarantee Agreement with the World Bank Group Covering an IBRD Loan to the Government of Iraq

Priti Patel: I have today laid a departmental Minute outlining updated details of a contingent liability of the US Dollar equivalent of £360 million which the Department for International Development (DFID) has undertaken, in respect of the World Bank Group. On 25 October, I laid a departmental Minute setting out DFID’s intention to guarantee a portion of a forthcoming Development Policy Loan from the International Bank for Reconstruction and Development (IBRD) arm of the World Bank to the Government of Iraq, subject to finalising the details of the terms of the guarantee. Further consideration of the implications of the original arrangements for the treatment of the World Bank by credit rating agencies has led me to amend the element of the proposal relating to the treatment of any payments recovered from the Government of Iraq, in the event of a default and the guarantee subsequently being triggered. The revised proposal entails the World Bank transferring the right to pursue and retain recoveries to the UK Government, should it wish to do so. This amendment to the guarantee arrangement will avoid undermining the Bank’s preferred creditor status, which is so critical to its ability to borrow at very favourable rates from the market and pass these on to its borrowers. The change to the treatment of recoveries should have minimal, if any, impact on the probability of a default by the Government of Iraq. There remain strong incentives for Iraq avoiding entering into arrears as doing so would lead to the IBRD not agreeing any new lending, and not providing any lending agreed under existing loans; it would also entail the payment of penalty charges by the Government of Iraq. In the event that a default did occur, and the guarantee is called, the UK would still provide compensation to the World Bank, in proportion to the UK’s guaranteed share of the overall IBRD loan. If this liability is called, provision for any DFID payment would be sought through the normal Supply procedure.

Ministry of Defence

Coalition Operations against Daesh

Sir Michael Fallon: The Coalition has today published its findings from an incident report into the Coalition air strikes in Dayr Az Zawr on 17 September 2016. While the report has concluded that the decision to identify the targets as Daesh military objectives was both reasonable and supported by the weight of information available at the time, post-strike analysis indicates it more likely than not that a Syrian Regime aligned force was struck after being mistaken for Daesh. The Ministry of Defence will always carefully examine any credible evidence that suggests we have struck a target in error. We have contributed fully to the Coalition’s investigation into this incident. The UK Armed Forces operate under strict Rules of Engagement, which govern the use of force, and we take all reasonable steps to avoid non-combatant casualties. All strikes conducted by the RAF are carried out in accordance with robust Rules of Engagement, UK interpretation of the Law of Armed Conflict and rigorous targeting processes and are approved through a strict assessment process undertaken by a team including British military, policy and legal advisers. Both the Coalition and the UK are reviewing the report’s conclusions and we will act on any lessons identified in order to mitigate the risks of such an error recurring.

Sir John Parker's Independent Report to Inform the National Shipbuilding Strategy

Sir Michael Fallon: Sir John Parker has submitted his independent report to inform the United Kingdom National Shipbuilding Strategy. He has consulted widely with Government, industry and the Trades Unions during his work. I have today placed copies of the report in the Library of the House and it will be made available on the Government website, gov.uk. The report is a balanced critique of the challenges faced by Government and industry in the naval shipbuilding sector in recent years. However, Sir John has identified a “renaissance” in a range of regional shipyards across the United Kingdom where he has found entrepreneurial attitudes and an enthusiasm to embrace change. His report includes 34 far-reaching recommendations to transform the United Kingdom’s shipbuilding industry which will lay the foundations for a modern, efficient and competitive sector capable of meeting the country’s future defence and security needs. It will also bring prosperity benefits for shipyards and their supply chains across the country. These are for the Ministry of Defence (MOD), wider Government and industry to consider. The Government welcomes the report and is committed to delivering a modern National Shipbuilding Strategy. We see it as a vital part of our industrial strategy focusing on increasing economic growth across the country and investing in a more skilled workforce: which is this Government’s approach for rebalancing Britain and delivering an economy that works for everyone, not just a privileged few. While many of the recommendations are for Government, the themes of Sir John’s report (modern digital engineering, industrial innovation, competitiveness, focus on apprenticeships and jobs, export focus) also show where industry, working with Government, needs to invest in order to increase opportunities for the shipbuilding sector across the United Kingdom and enable it to thrive and grow. It also means using our shipbuilding expertise to become a leading producer of ships for export. We must use the opportunities that Brexit provides to become a global trading power again.Shipbuilding is an important part of our economy. The MOD estimates that the Government spent around £1.4 billion on shipbuilding and repair in Financial Year 2014-15, of which approximately 96% was spent with five UK prime contractors. Around 15,000 people are directly employed in UK shipbuilding and repair, with an additional 10,000 jobs indirectly supported through the wider supply chain in the UK. Realising Sir John’s ambition for shipbuilding would benefit the whole of the United Kingdom. Our vision therefore is for a strong shipbuilding sector, backed up by a modern industrial strategy. It is important that the Government gives Sir John’s work the full consideration that it deserves. I have asked officials, working with others across Government, to examine the report and recommendations, and to discuss them with industry. The Government will then publish a full and considered response and implementation plan in spring 2017. This response will be the National Shipbuilding Strategy. I would like to place on record my thanks to Sir John for providing such a thorough analysis of naval shipbuilding and recommendations for a new era of co-operation and drive across the shipbuilding enterprise.

Department for Transport

EU Transport Council

Chris Grayling: I will attend the only Transport Council under the Slovakian Presidency (the Presidency) taking place in Brussels on Thursday 1st December. The Presidency is aiming for a general approach on the proposed Regulation on common rules in the field of civil aviation safety and establishing a European Union Aviation Safety Agency. The proposed general approach embodies the principle of proportionality and encourages the use of performance based regulations. It also makes small but appropriate extensions to the scope of the European Aviation Safety Agency’s responsibilities. The Presidency is also aiming for general approaches on two proposals aimed to simplifying and streamlining existing passenger ship safety legislation. The first of these is an amending Directive on safety rules and standards for passenger ships. This Directive sets harmonised safety standards for seagoing passenger ships operating on domestic routes throughout the UK, and the proposed amendments look to simplify the current legislation. In particular, this deregulatory approach proposes that standards for passenger ships below 24m are better suited to regulation at national level. The second is a proposal for a Directive on a system of inspections for the safe operation of ro-ro ferry and high-speed passenger craft in regular service. The proposed revision updates, clarifies and simplifies the existing survey (inspection) requirements for ro-ro ferries and high-speed passenger craft, while maintaining the same level of safety and key delivery mechanisms. There will be a progress report on a related proposal to amend two Directives; one on the registration of persons sailing on board passenger ships operating to or from ports of the Member States of the Community, and one on reporting formalities for ships arriving in and/or departing from ports of the Member States. Negotiations are at an early stage, and the Presidency’s progress report summarises the discussions so far. Discussions on this proposal will continue during the forthcoming Maltese presidency in 2017. The Presidency has proposed a policy debate on the extension of the European Fund for Strategic Investments (EFSI) and Connecting Europe Facility (CEF) blending, which provides further funding for EFSI. The proposal will continue to enhance the financial case for projects and value for money from the EU budgets. Under Any Other Business, the Commission will provide an update on the outcome of the 39th Assembly of the International Civil Aviation Organisation held in September and October 2016, combined with the latest developments in the International Maritime Organisation. The Commission will also provide information on the state of play on security in the transport sector, its planned package of road initiatives, road safety, developments in EU-type approval legislation and the progress made on the implication of the ’emissions irregularities’. The Commission will update on the state of play on GALILEO, present its European Strategy for Low Emission Mobility, and provide information on its initiative on ”Women in Transport”. The Cyprus Delegation will provide information on the draft common aviation area agreement between the Republic of Turkey and the European Union and its Member States. The Dutch Delegation will then update the Council on cooperation in the field of connected and automated driving. Finally, the Maltese delegation will inform the Council on the work programme for their forthcoming Presidency.   


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Department for Environment, Food and Rural Affairs

November Agriculture Council

George Eustice: I represented the UK at the Agriculture and Fisheries Council on 14 and 15 November in Brussels.Commissioner Vella presented a proposal for a Council Regulation setting deep sea fishing opportunities for 2017 and 2018. Commissioner Vella noted there were challenges in setting total allowable catches (TACs). The UK, Poland, Sweden and Denmark stressed the need to protect stocks, although Denmark noted that the TACs should not be lowered too far or these stocks would become obstacles to fully implementing the landing obligation. A compromise text mitigated some of the proposed cuts, whilst still providing adequate protections, and was therefore unanimously agreed.Commissioner Vella presented proposals for the North Sea Multi-Annual Plan (MAP). The UK, Sweden, Germany, Denmark, Belgium and Poland expressed their general support for the proposal. However, the UK, echoed by France and Denmark had concerns that some of the additional controls would increase the administrative burden without any commensurate benefit.Mr Cees Veerman, Chairman of the Agricultural Markets Taskforce (AMT), presented the report of the AMT and the main recommendations within it, which set the agenda for future work. They included strengthening market transparency, and setting out a framework including a list of prohibited, basic Unfair Trading Practices (UTPs) which would carry the penalty of sanctions. The UK welcomed that the AMT largely based the recommendations for UTPs on the work of the UK Groceries Code Adjudicator. Commissioner Hogan and Vice-President Katainen presented the DG AGRI report on the cumulative impact of Free Trade Association (FTA) concessions on agriculture. Commissioner Hogan stressed that it did not represent a projected outcome of the 12 ongoing or potential EU-third country FTAs within its scope. The report analysed the cumulative economic impacts of tariff liberalisation through two theoretical scenarios. Overall, the conclusions were balanced and confirmed potential for net trade gains. Vice-President Katainen set the report in the context of the EU’s wider free trade, jobs and growth agenda. The UK underlined its longstanding support for tariff-free access and reduced non-tariff barriers, but noted that agriculture goes beyond questions of simple economics.  Any other business items The UK introduced an item on behalf of the North Western Waters regional group on the landing obligation. It drew attention to the good progress made so far in implementing the landing obligation, a key part of the last reform of the Common Fisheries Policy (CFP), but also the potential problem of choke species had to be dealt with. The UK presented ongoing work in the regions on this issue and pressed the Commission to heed it. The UK points were supported by Portugal, Germany, Ireland, Denmark, Belgium, France, Spain, the Netherlands, Latvia and Sweden, with many thanking the UK for bringing this important issue to the table.Greece voiced their concerns that the difference between customary names and standard names for Geographical Indication protected products undermined the EU system. The Commission pushed back by pointing out that the current legal wording ensures sufficient security.Commissioner Andriukaitis announced that the Commission will establish and host the first meeting of the Animal Welfare Platform, which will discuss best practice in this field, during the Maltese Presidency. The UK’s support for this call and the need for a review of rest periods in line with current scientific advice was praised by several animal welfare charities via online media platforms.Denmark raised concerns about the increased use of antimicrobials in the veterinary sector in some Member States and called for immediate action. The UK, along with eight other Member States supported this call.


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